Barr on ESG investment concerns: 'Only responsibility' is the 'economic benefit to the shareholder'
Former Attorney General Bill Barr joined 'America's Newsroom' to discuss concerns over ESG investment policies and the latest on the DOJ's special master ruling.
Former Attorney General Bill Barr is raising concerns surrounding environmental, social, and governance (ESG) policies, warning the repercussions of prioritizing ESG over a company's bottom line go well beyond the investment world.
Barr discussed Wednesday how the "abuse" of the investment can be used as a political ploy to dictate national policy and can even be seen as a breach of fiduciary duty.
"This is a tremendous concentration of wealth that is using it in an abusive way… circumventing the whole democratic process," Barr said on "America's Newsroom." When little investors go out and buy ETFs, funds, and other things, as you say, the ownership is technically in the hands of mainly of three big companies: BlackRock, Vanguard and State Street and some others, but those are the big three."
BLACKROCK CEO LARRY FINK DISCUSSES INFLATION, ESG INVESTING IN THE ENERGY SECTOR
FILE - Attorney General William Barr looks on during a news conference at the Department of Justice in Washington, Dec. 21, 2020. (Photo by MICHAEL REYNOLDS/POOL/AFP via Getty Images) (MICHAEL REYNOLDS/POOL/AFP via Getty Images)
"And technically these people own… a high percentage of stock in these companies, and they're dictating to the companies policies like energy policy and things like that," he continued. "So when they tell a big company, stop producing oil or we're going to vote against you, essentially, that's setting national policy, and they're using other people's money to throw their weight around."
Barr penned an op-ed in the Wall Street Journal Tuesday, warning against how ESG policies have been used and could be seen as a violation of fiduciary duty.
He discussed 19 state attorneys general who wrote a letter to BlackRock CEO Laurence D. Fink, accusing the company's ESG policies of breaching the commitment to act upon maximizing financial returns as opposed to promoting political objectives.
Barr reiterated the only objective investors should have is acting in the best interest financially of the shareholders.
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"That's their only responsibility," Barr said. "And they're just pursuing their political preferences and using other people's money to have the weight to do it."
"There's also the possibility of companies emerging that just focus on what they should be focused on, which is return to the owner," he continued. "And I think we have to look at this politically because this means a handful of companies can decide our energy policy, our equity policy and stuff like that."
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